Setting aside the industry comparison for now, ITAB Shop Concept's ROCE is mediocre in absolute terms, considering the risk of investing in stocks versus the safety of a bank account. Using our data, ITAB Shop Concept's ROCE appears to be around the 7.2% average of the Commercial Services industry. ROCE is commonly used for comparing the performance of similar businesses. View our latest analysis for ITAB Shop Concept Is ITAB Shop Concept's ROCE Good? So, ITAB Shop Concept has an ROCE of 7.2%. Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)Ġ.072 = kr296m ÷ (kr6.2b - kr2.1b) (Based on the trailing twelve months to March 2019.) Author Edwin Whiting says to be careful when comparing the ROCE of different businesses, since 'No two businesses are exactly alike.' So, How Do We Calculate ROCE?Īnalysts use this formula to calculate return on capital employed: Overall, it is a valuable metric that has its flaws. Generally speaking a higher ROCE is better. ROCE measures the amount of pre-tax profits a company can generate from the capital employed in its business. Return On Capital Employed (ROCE): What is it? And finally, we'll look at how its current liabilities are impacting its ROCE. Next, we'll compare it to others in its industry. Specifically, we're going to calculate its Return On Capital Employed (ROCE), in the hopes of getting some insight into the business.įirst up, we'll look at what ROCE is and how we calculate it. Today we are going to look at ITAB Shop Concept AB (publ) ( STO:ITAB B) to see whether it might be an attractive investment prospect. Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
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